Shifting from Digital New to Now

December 27, 2017

Shifting from Digital New to Now

While Proof of Concepts (POC) and experimentation may continue, its time to put a stake in the ground for the what and how of Digital Transformation. How are IT Leaders moving out of the sandbox and shifting from Digital New to Now?

Top 5 Learning Points

Organization must be able to translate their digital efforts to the customers by providing a great digital experience.

Customers look for value while using the web or mobile applications and organizations must be able to deliver that by adapting.

Companies must be able to understand what customers expect from their digital channels and give them exactly the same.

Transformation is key to success.

Understanding the legacy and taking decisions thereby to suit them is an important strategic tool that must be applied.

Show Notes

Not all experiments lead to profit generation and that must considered during developing strategies.

Customer focused approach must ensure that it adds value to their use of the digital apps.

Legacy systems can be kept as they are and additional features can be bought which is important.

Some part of the technology might become obsolete and must be parted away without any hesitation.

Uncertainty is good and should not deter companies from trying new things.

Transcript Summary

Digital presence is a must in today’s online world. But how can businesses leverage using the virtual presence of customers and increase their profitability? How can organizations keep experimenting and how much failure is okay? Understanding the nuances of digitalization and how to implement it in the right context is what is discussed thoughtfully backed with knowledge and expertise.

Transcript:

Sanjog: Our topic for today is “Shifting from Digital New to Now.” Our guest for today is Marianne Marck, the Chief Information Officer, Ritchie Bros. Any organization, digital transformation is part of the agenda. veryone is talking about going through this transformation but there is experimentation going on, proof of concepts being done. There has to be a point where we say, that’s some good learning. We know what we should work on versus not, and then it should start becoming mainstream. Am I being too anxious or do you think it’s just right about the time when honeymoon should be over?

Marianne: I find many companies taking an experiment to being a part of everyday business. It can be a challenge especially because some of those experiments may not necessarily result in revenue generation or they may not be of value stream that you need to have as part of your business ongoing. It really depends on where everyone is and terms of their digital transformation journey but for some companies, like at Ritchie Bros, we’ve been digital for a long time. We started out with simulcast capability so that when you run auctions, they run live and they run online at the same time and we’ve been doing that since 2001. Half of all of our transactions happen online but we still have a lot of legacy in the backroom. The challenge there is that for our employees, we still have a lot of paper processes, so we’re missing out on some of the efficiency gains that are going digital would bring us. That’s just one example. In June, we acquired Iron Planet and everyone there as a true hallmark of a digital company works online.

All of the information they need to do a great job for customers is there, the data and information that they need. For many companies, they are in very different phases, most companies have adopted and had to be where their customers are but some really haven’t quite made it on their mobile journey. Or some really haven’t harnessed data to build great products yet, but we’re sort of in that middle phase and looking at where we really invest for the biggest bang for our customers in our company.

For many companies, they are in very different phases, most companies have adopted and had to be where their customers are but some really haven’t quite made it on their mobile journey. Or some really haven’t harnessed data to build great products yet.

Sanjog: You’re right that there could be two levels at which people could be going all the way, and if they have a very strong revenue case they can keep going and they may have already made significant progress. But then, we also have situations where it is shown as a transformation till the time it’s completely done will not create the final value that we all dream of. We still have to sell it because without the funding, it will never see the daylight. What has been seen by many organizations is they start a journey, they would try to go out and get a piece funded. When they move forward since the business stakeholders don’t see the value truly created, tangible value and to the level that they expected, this starts becoming disenchanted. They almost pull the plug or in some cases they actually pull the plug. How can we prevent that from happening because this is happening way too often?

Marianne: Well, I think this is one of the biggest challenges that every CIO or CTO faces. Because in many cases, the foundational technology is not in place. They have legacy systems, they have some newer applications but they may struggle a great deal to be able to expose all the value those applications bring in the form of services that can be exposed to customers through mobile applications or web applications. The challenge is, how do you address bringing to life? Let’s say, it’s an inventory management system or another application that actually would have a lot of value if your customers could directly access it. Those foundational projects I think are probably the most challenging. The foundational work has to be done on an ongoing basis. It actually requires an ongoing investment so the first thing that the CIO has to do is actually create a good plan for work that foundational transformation but also has to deliver customer-facing value along the way.

Some projects can take two or three years but you must deliver something of value, something tangible for customers in less than one year. Most companies now have agile processes and they’re able to deliver ongoing enhancements, every two weeks or every week but that’s because the company has invested in that value stream. They have dedicated technology people and dedicated product people and it’s a living breathing thing now. For example, your online web presence or your mobile application, they do require ongoing investment but for those of back of house transformations that really open up the world for your customers. Those really take some very deep planning and deep commitment. But I would also say that you can’t go that commitment alone.

The CIO should always have a partner in the business. Your business transformation, in order for it to actually happen and hit your work really well with your customers, your product operations and marketing people have to be part of that effort from the very beginning. You have to be able to get to pilot, do some demonstration, and then break down that big project into chunks so that you are delivering a visible value in less than a year because otherwise those projects don’t last. I’ve seen multi-year projects fail, pretty consistently because people lose their patience along with business leaders dealing with the risk of the money over time. Because in many cases, the foundational technology is not in place. They have legacy systems, they have some newer applications but they may struggle a great deal to be able to expose all the value that those applications bring in the form of services that can be exposed to customers through mobile applications or web applications.

The CIO should always have a partner in the business. Your business transformation in order for it to actually happen and hit your work really well with your customers, your product operations and marketing people have to be part of that effort from the very beginning.

Sanjog: This problem of long-planned projects or things which are very monolithic. I’m hoping that more and more leaders are becoming intelligent about how much they chop out the projects so that they’re manageable chunks which you can get done. Coming to the digital side, it seems, there is a sense of fear or uncertainty about, are we ready yet to embrace digital to the fullest? Because of this there is a lot more experimentation going on, then I would have imagined in a given context, in a given organization before they’ll say, “Let’s roll it out.” There’s way too much analysis paralysis because they feel it’s too new, we are not equipped for it, our people have no background in it and so we got to test it a little more, test it a little more. Why is that? Do you think we really are not ready r all this effort?

Marianne: We’re not in that place. Primarily, because we made some very big bets and you could say we acquired some of our digital transformations by acquiring a company that was a pure online player for the last 18 years and so we have our plate full with a great roadmap for transformation. We can’t lose sight of our customers along the way and that is something that everyone must think about. With a proof of concept or why we might get stuck in analysis paralysis would be because we have an uncertainty about the value and we have uncertainty about how to pull it off.

This is why companies absolutely have to fund their digital channels on an ongoing basis and make that investment in the technology skills and products skills and customer experience skill sets. Without that investment and that ongoing care and feeding of what should be a true value stream for the company, they’re not going to make it.

They have it set themselves up in some cases that they feel like, we’re lost in analysis paralysis. They haven’t maybe set themselves up to really be live and to test live with their customers to be able to do a small little release here and there and to see if that resonating. Is it leading to more conversions? Is it delighting our customers and making our site sticky for them and making them want to come back? Is the experience frictionless? Is it so easy for them or are they getting hung up and stuck along the way? I think companies have to actually to make that shift, it has to be not just a one-time thing or a marketing blast or something like that. It actually has to be a going concern that is funded on a regular basis and whose value is measured on a regular basis.

With a proof of concept or why we might get stuck in analysis paralysis would be because we have an uncertainty about...
Read Full Transcript v

Sanjog: Our topic for today is “Shifting from Digital New to Now.” Our guest for today is Marianne Marck, the Chief Information Officer, Ritchie Bros. Any organization, digital transformation is part of the agenda. veryone is talking about going through this transformation but there is experimentation going on, proof of concepts being done. There has to be a point where we say, that’s some good learning. We know what we should work on versus not, and then it should start becoming mainstream. Am I being too anxious or do you think it’s just right about the time when honeymoon should be over?

Marianne: I find many companies taking an experiment to being a part of everyday business. It can be a challenge especially because some of those experiments may not necessarily result in revenue generation or they may not be of value stream that you need to have as part of your business ongoing. It really depends on where everyone is and terms of their digital transformation journey but for some companies, like at Ritchie Bros, we’ve been digital for a long time. We started out with simulcast capability so that when you run auctions, they run live and they run online at the same time and we’ve been doing that since 2001. Half of all of our transactions happen online but we still have a lot of legacy in the backroom. The challenge there is that for our employees, we still have a lot of paper processes, so we’re missing out on some of the efficiency gains that are going digital would bring us. That’s just one example. In June, we acquired Iron Planet and everyone there as a true hallmark of a digital company works online.

All of the information they need to do a great job for customers is there, the data and information that they need. For many companies, they are in very different phases, most companies have adopted and had to be where their customers are but some really haven’t quite made it on their mobile journey. Or some really haven’t harnessed data to build great products yet, but we’re sort of in that middle phase and looking at where we really invest for the biggest bang for our customers in our company.

For many companies, they are in very different phases, most companies have adopted and had to be where their customers are but some really haven’t quite made it on their mobile journey. Or some really haven’t harnessed data to build great products yet.

Sanjog: You’re right that there could be two levels at which people could be going all the way, and if they have a very strong revenue case they can keep going and they may have already made significant progress. But then, we also have situations where it is shown as a transformation till the time it’s completely done will not create the final value that we all dream of. We still have to sell it because without the funding, it will never see the daylight. What has been seen by many organizations is they start a journey, they would try to go out and get a piece funded. When they move forward since the business stakeholders don’t see the value truly created, tangible value and to the level that they expected, this starts becoming disenchanted. They almost pull the plug or in some cases they actually pull the plug. How can we prevent that from happening because this is happening way too often?

Marianne: Well, I think this is one of the biggest challenges that every CIO or CTO faces. Because in many cases, the foundational technology is not in place. They have legacy systems, they have some newer applications but they may struggle a great deal to be able to expose all the value those applications bring in the form of services that can be exposed to customers through mobile applications or web applications. The challenge is, how do you address bringing to life? Let’s say, it’s an inventory management system or another application that actually would have a lot of value if your customers could directly access it. Those foundational projects I think are probably the most challenging. The foundational work has to be done on an ongoing basis. It actually requires an ongoing investment so the first thing that the CIO has to do is actually create a good plan for work that foundational transformation but also has to deliver customer-facing value along the way.

Some projects can take two or three years but you must deliver something of value, something tangible for customers in less than one year. Most companies now have agile processes and they’re able to deliver ongoing enhancements, every two weeks or every week but that’s because the company has invested in that value stream. They have dedicated technology people and dedicated product people and it’s a living breathing thing now. For example, your online web presence or your mobile application, they do require ongoing investment but for those of back of house transformations that really open up the world for your customers. Those really take some very deep planning and deep commitment. But I would also say that you can’t go that commitment alone.

The CIO should always have a partner in the business. Your business transformation, in order for it to actually happen and hit your work really well with your customers, your product operations and marketing people have to be part of that effort from the very beginning. You have to be able to get to pilot, do some demonstration, and then break down that big project into chunks so that you are delivering a visible value in less than a year because otherwise those projects don’t last. I’ve seen multi-year projects fail, pretty consistently because people lose their patience along with business leaders dealing with the risk of the money over time. Because in many cases, the foundational technology is not in place. They have legacy systems, they have some newer applications but they may struggle a great deal to be able to expose all the value that those applications bring in the form of services that can be exposed to customers through mobile applications or web applications.

The CIO should always have a partner in the business. Your business transformation in order for it to actually happen and hit your work really well with your customers, your product operations and marketing people have to be part of that effort from the very beginning.

Sanjog: This problem of long-planned projects or things which are very monolithic. I’m hoping that more and more leaders are becoming intelligent about how much they chop out the projects so that they’re manageable chunks which you can get done. Coming to the digital side, it seems, there is a sense of fear or uncertainty about, are we ready yet to embrace digital to the fullest? Because of this there is a lot more experimentation going on, then I would have imagined in a given context, in a given organization before they’ll say, “Let’s roll it out.” There’s way too much analysis paralysis because they feel it’s too new, we are not equipped for it, our people have no background in it and so we got to test it a little more, test it a little more. Why is that? Do you think we really are not ready r all this effort?

Marianne: We’re not in that place. Primarily, because we made some very big bets and you could say we acquired some of our digital transformations by acquiring a company that was a pure online player for the last 18 years and so we have our plate full with a great roadmap for transformation. We can’t lose sight of our customers along the way and that is something that everyone must think about. With a proof of concept or why we might get stuck in analysis paralysis would be because we have an uncertainty about the value and we have uncertainty about how to pull it off.

This is why companies absolutely have to fund their digital channels on an ongoing basis and make that investment in the technology skills and products skills and customer experience skill sets. Without that investment and that ongoing care and feeding of what should be a true value stream for the company, they’re not going to make it.

They have it set themselves up in some cases that they feel like, we’re lost in analysis paralysis. They haven’t maybe set themselves up to really be live and to test live with their customers to be able to do a small little release here and there and to see if that resonating. Is it leading to more conversions? Is it delighting our customers and making our site sticky for them and making them want to come back? Is the experience frictionless? Is it so easy for them or are they getting hung up and stuck along the way? I think companies have to actually to make that shift, it has to be not just a one-time thing or a marketing blast or something like that. It actually has to be a going concern that is funded on a regular basis and whose value is measured on a regular basis.

With a proof of concept or why we might get stuck in analysis paralysis would be because we have an uncertainty about the value and we have uncertainty about how to pull it off.

We can’t lose sight of our customers along the way and that is something that everyone must think about

Sanjog: What you just said about people should be doing this experimentation and that’s exactly what I’m referring to, that they’re doing only experimentation. What you just mentioned, go and try it with a customer live. They do try it, but then they want to do yet another trial and not actually take it mainstream. At what point would somebody feel that, I have really done all the possible trials before I put it into production and roll it out. What’s holding them back?

Marianne: If companies are churning, then they have a bigger problem. Then they’re having a lot of difficulties really determining, what is going to resonate with their customers and what are customers picking up because, you have to look at the money we are spending on this experimentation. Also, what is the minimum that we need in order to be able to turn it into revenue for our company. I would say if companies find themselves stuck, they may need to put some of those programs on hold while they assess what the customers need the most, what is going to give value to the company, what is really going to increase the revenue?

For example, they may not have a good way to measure it in one in some cases, maybe they’re doing some marketing. We’re innovative kind of experimentation but if there isn’t a way to measure what kind of revenue or value that brought into the company, then it’s probably just that a flash in the pan and if it’s not really producing recurring revenue. I would say companies must measure the effects of their efforts. We’re in a business, at Ritchie Bros where we sell very high-value equipment. We can do a targeted one on one marketing and we can show that return on investment from a digital marketing side. I’ve also worked in other industries where we sold very high-value equipment and it’s very important to have an attribution model so that you can see, when I invested in this marketing channel, I can show through the clicks stream data, all up until the sale. What did my customer use, the way to get into the site, then you can measure those marketing vehicles, how much to be spent on them and how much revenue did they bring in. Those kinds of attribution models are a great way to actually run your online business and if you don’t have a way to measure it, I would say, it’s very hard to know if your bets are really placed in the right place and they’re going to pay off.

We’re innovative kind of experimentation but if there isn’t a way to measure what kind of revenue or value that brought into the company, then it’s probably just that a flash in the pan and if it’s not really producing recurring revenue.

We’re innovative kind of experimentation but if there isn’t a way to measure what kind of revenue or value that brought into the company, then it’s probably just that a flash in the pan and if it’s not really producing recurring revenue.

Sanjog: Then let’s look at beside the point solution of like suppose taking something really measurable. Let’s look at the difference between the companies who have actually been able to scale their operations, the approach they take to running their business into a digital now versus other people who are just experimenting. What did they do differently? We’ve noted a small percentage of companies who made much better. They’ve gone much far in terms of making progress and shift from digital new to now. If you were to do a postmortem, you don’t have details for every company that has done it, but what do you see are the common fundamentalists who would have helped them to drive that shift much better than the others?

Marianne: I think the first thing that makes a big difference is that all of the leadership in the company believe that they have to transform. Because they will not be where their customers are if they don’t, but we have to reach all of our customers wherever they are today. They’re on their mobile devices, everyone is working online and we have to reach customers where he or she are in a meaningful way and in a way that maybe transforms the way he or she interact with the world. We’ve seen big digital disruptors that actually change the way people are consuming. We’re right in the middle of a pretty significant people around that. This year there were a record number of store closings because everyone is really made that big shift to online. Companies actually have to think about these big seismic shifts and how well they’re going to be able to compete in a world that is transforming very rapidly.

A big challenge for companies is to actually where to start. Most companies as we know already have that online presence but they maybe have a real harnessed differentiating capabilities for their customers. It’s identifying the things that are going to matter the most and bring the most value that really helps the company be successful so it isn’t just about being the flashiest but it’s also about being having the most staying power and providing goods, services, whatever that company has to offer in a way that really resonates and meets the customer’s needs.

Ritchie Bros are in a B to B space, so we have to think about our customers, they’re running their business, they’re making big investments. What are all of the capabilities we can provide online? One thing we do is financing. But those actually make it a lot easier for our customers to transact with us and we want to be very sticky with them too. We have a lot of things in the works too that are very digitally based products that make a big difference to those customers with the set to position and pricing predictions. A lot of different services are going to help them do a better job.

A big challenge for companies is to actually where to start. Most companies as we know already have that online presence but they maybe have a real harnessed differentiating capabilities for their customers.

That is really a big thing is what does that really mean to us? What is that transformation mean to us? I think all companies had to ask themselves that.

Companies actually have to think about these big seismic shifts and how well they’re going to be able to compete in a world that is transforming very rapidly.

Sanjog: If you’re to go digital, I know you could have coexistence of some legacy but then you are leaving something on the table. We understand at the same time if you try to go holistic, then you will be waiting and that nobody wants to do. What is it that we can do that organization embrace the idea about progress being better than perfection but at the same time, they’re also able to drop the legacy at some point, a lot of people talk digital and they complain, I’ve got some legacy? Some of the legacy they let go but still there is a portion of business or stakeholders fighting tooth and nail to keep this legacy so legacy never goes away so you never become fully digital.

Marianne: The fact of the matter is, when we talk about legacy, it’s really how old is it? Is it technology from the 80s and 90s or is it more modern? I would encourage everybody to think about the fact that you don’t really have to replace everything but you do need to expose the capabilities. From a technology standpoint, creating a service layer, on top of a legacy application. I’d say, it’s a legacy inventory application, by creating a service layer in API on top of that application, then you can unlock the information inside of it. Investing in that middle tier layer is critical for companies because the whole point is to be able to expose capability to your mobile applications and your web apps and be able to let the world get into all of those and harness the data and information inside of that, so that middle layer strategy is incredibly important.

It also creates a facade on top of those old legacy applications where you can then change the application but you have that middle layer to create that abstraction so that that change out can be managed appropriately with the right amount of change. That’s a very important strategic consideration in all of your legacy applications. It does mean that investment in that middle tier is important.

..When we talk about legacy, it’s how old it is? Is it technology from the 80s and 90s or is it more modern? I would encourage everybody to think about the fact that you don’t really have to replace everything but you do need to expose the capabilities.

Sanjog: What you just explain is a fantastic example of us understanding the plumbing and be able to tackle it. I think the customer in, means outside in approach, when you are digital, you’re trying to go digital, you want to optimize every possible way to offer the customer a chance to engage with you in a brand new, more effective, more interactive, more engaging way. If you carry some legacy, doesn’t it pull you down a couple of notches perhaps in being able to deliver that ultimate experience to your customer because that’s the very reason you started the journey. Even though you created you internally integration and other things, isn’t that a compromise to where you actually wanted to go from a customer standpoint?

Marianne: Most of the delightful experiences for customers require you actually setting the data and information free and to be able to deliver it on a more real-time basis. Those are some of the technology investments with streaming that can actually expose information to customers on a more real-time basis because that means you’re interacting with them in real time. I think a lot of very high value-add types of features and functions for customers really have that going for them. They operate real time. For example, let’s say I’m an e-commerce company. If I can actually show a shopper that I have that inventory and it’s available at this store and we can package it up for your pickup and it’s located near you or we can deliver it. I would say that you have to think about that experience, it must start with the customer experience.

There are times when you have to cobble things together in order to be able to get that experiment actually to shine but if you see, that really resonated or did it not resonate. I think a lot of different companies have been experimenting with delivery and finding like, there’s a smaller adoption set, expect that to probably grow it for a time but. I think that’s a good example of not everybody is ready for delivery all the time. But in China, they certainly are, because they’re very used to having delivery all the time. At any rate, there are times when you have to have an imperative. The imperative is incredibly important. We will do X, everyone in the company works towards that end and then we measure the results of that. The companies have to really watch the trends that are happening all over the world, looking at how consumers are changing, looking at how companies are changing, and really thinking about what are the most delightful experiences that we can create that are going to keep everybody coming back.

I would say that you have to think about that experience, it must start with the customer experience.

There are times when you have to cobble things together in order to be able to get that experiment actually to shine but if you see, that really resonated or did it not resonate. I think a lot of different companies have been experimenting with delivery and finding like, there’s a smaller adoption set, expect that to probably grow it over time but

Sanjog: One is to be able to create that experience for all parties involved. But then, how do you preserve your IT investment, are we saying that we are able to get away with what we truly wanted? Because when you said you use the word imperative, but isn’t that imperative subject to an individual or group’s perception of what’s the best possible?

Marianne: You won’t get there if you don’t embrace some of those big transformations as a company. Without those big targets and big ideas, then you’re not taking an appropriate amount of risk. Some companies maybe are too conservative. If we just keep operating this way, people have loved us for years. Those are the companies that are probably going to get cut short. Because they will become irrelevant. Companies are competing with innovation in a way today like they never have before. It should be an imperative for companies to do that. It stretches your technology organizations though to the extreme in some cases. When you find something that really works, sometimes companies haven’t actually operationalized these innovations to the extent that they can operate on that scale. That’s often a challenge we find ourselves in . But now we actually need to operate it for thousands of people or maybe even over a million people, and that’s when a lot of our really hard work begins is operationalizing a success story.

At the same time, we also have to really tune it to say, “Oh, it’s great and it’s super popular.” Are we maximizing revenue? Are we making money from this, this great service that we’ve now provided? Is it profitable for us? Where do we need to tune it? All of those kinds of things on an ongoing basis or are truly required for us.

Companies are competing with innovation in a way today like they never have before. It should be an imperative for companies to do that.

Sanjog: In theory that particular approach to going digital makes sense, but when you tried it, it did not go as well with the customers. That could be a limited data point because you may not have experimented enough. If it is failing, then maybe people at the top say, we have to go with this and it is imperative. But people who are mid-managers, how many times will they be allowed to bring the negative result back and still given the permission to go and continue this? How do we prevent a disconnect between an imperative to go digital and then shooting people’s idea or experimentation down and losing your patience in the process? There is sometimes a disconnect between what we say and when it comes down to the brass tacks, then we’d lose steam or back out, how do we prevent that from happening?

Stakeholders say yes, go digital, experimentation starts, and not every experimentation or not every experiment is successful. You have to go back and report it, you go back and report yet again that this is not going well. How far stakeholder or the executive management does is staying positive after getting one bad news after another after another?

Marianne: We often seem the stakes go down in historic memory of companies and that mistake brought up again and again. The good things and the good intentions that that mistake started are then trotted out all the time. That’s a true sign of a company actually hasn’t embraced failure as a way to learn and to risk taking over all as an organization. We all see that happen but mostly it’s because it’s historic pain of having invested money and not getting a return on it. The pressures on companies today to show a return on investment is probably at an all-time high as companies must show to the street, especially public companies have to show an ongoing value for shareholders and there’s a lot of pressure there. You have to make sure that those risks are measured and you need to talk about risk upfront and projects.

For example, we sell thousands of pieces of very large equipment at our sales. We may sell around and our bigger sales were selling 8000 to 10,000 pieces of equipment. We bring it all into a yard. Our big yards are over hundred acres in size. If I’m looking for equipment, I have to go out in that yard and find it. Now we’re incredibly organized. The equipment all lined up beautifully by equipment type, but what we did was on our mobile application, we put in a way finding tool, so that a customer could put in a specific lot they’re interested in and the map would point them and take them exactly to that piece of equipment on their mobile app. It wasn’t a huge investment. But what we didn’t think quite enough about was, it took a lot of work by the yard people to create the map to begin with. So it has a big payoff or a big sale, doesn’t add to revenue, it’s very convenient. But it’s a lot of work for the yard people, for smaller sales and they don’t really need it so much. That was always trotted out and was a little bit of a surprise too because we were working on one area and we’re an agile team and we made this. But well here’s where that value stream is, we fund those streams every year, here is where that value stream didn’t pay off. We actually have to develop that new language for talking around what are the risks we’re taking upfront? What would we anticipate?

Another example, as I worked on a very significant project that required new algorithms and it was for doing online advertising and one to one marketing and the algorithms really required us as a team to create new technology. It was brand new, those algorithms don’t necessarily work out the first time and they didn’t. We had to do a lot of tuning and refining and actually change the basis of the algorithms. That’s a pretty expensive proposition. We’re going to have to go through a pilot phase. Does everyone have the stomach for the risk we’re going to take as we invent these new capabilities because he or she then may not work the first time through? Truly innovative technology companies have that in their DNA experimentation trying and that’s why in some cases they make those very significant investments in technology. If you recall Amazon operated without producing a profit for many years but in that process, they developed truly cutting-edge technologies.

We have to really prepare our leadership for the risks that we’re going to take when we’re inventing something new. The challenges that may occur and then if it’s brought up again as an antidote to failure, was a risk, worth it. We took a risk we experimented, this is what we learned and this is how we apply that going forward.

The challenges that may occur and then if it’s brought up again as an antidote to failure, was a risk, worth it.

We have to really prepare our leadership for the risks that we’re going to take when we’re inventing something new. The challenges that may occur and then if it’s brought up again as an antidote to failure, was a risk, worth it. We took a risk we experimented, this is what we learned and this is how we apply that going forward.

Sanjog: What you just mentioned almost seems to convey that the technology leader has to take the protagonist’s role in getting an innovation through but if you were to look at any digital initiative before you slap technology on it, it has some underlying process changes or improvements or transformation. That means your business unit leader has first to step up and ask the same question but in a different context which is, can you handle this change in the process or a change in the way we do business? Who is supposed to lead with the baton and then pass it along to the next group? What would work best?

Marianne: The most successful transformations are team efforts. They must be a partnership of product and operations and marketing. They absolutely have to be. The operations folks need to be really well informed of any risks. The marketing team needs to get very excited about what we’re going to be doing for customers. But it has to be a team play. I think a lot of technologists can sometimes forget this. I know I do. I often I get so excited about the technology basis of it. It’s just a part of our DNA that we always have to remember that at the end that transformation really happens when it’s successfully rolled out to customers. And that means everybody has to have gone the distance, do the rollout, be very collaborative in his or her design. Those are the projects that are really successful and everybody’s pulling together to make it a success.

It’s really a partnership from the very beginning that has to take place. Every technologist has to work side by side with their product leader or their marketing leader to be able to describe what the outcomes are going to be and describe the risks. Create that product vision, but then also describe how we’re going to get there and that that requires a very deep partnership with those teams.

The most successful transformations are team efforts. They must be a partnership of product and operations and marketing. They absolutely have to be.

Sanjog: If you started the journey and you said, this is not going to be a holistic change in one shot, then you go a partial mode. That means you’re going to deploy technology, change some processes, do this rip and replace. But then comes the time when you start looking at another piece. I have to do something more, it means I have to rip again and replace. All of this is very expensive. Are you saying that if you go the bite-size approach, we have to be ready to take a significant chunk or we should expect that there will be a lot of throwaway work before you reach to that Holy Grail? Is that how digital transformation will come about? The whole idea of us going digital to make it successful is we have to start somewhere, as a partial mode we have to go and then you might go to the next phase. But then you figure out what you did in the first cut, could be a throwaway work or at least it will have to be ripped and replace yet again. That means a lot of money spent to get to finally the Holy Grail, can we be smarter in approaching this?

Marianne: One of the things that get in the way of us being smarter is that that sense of urgency can be overwhelming, that it’s hard to see beyond the next target capability or enhancement. One of the things that are required from the team as a whole as we design customer experiences. We think about what is going to be the value as we think about on the back end, how we’re going to expose that value on an ongoing basis and throwaway work will definitely be part of it. You have to accept some of that because it’s true as we do a prototype and we expose that. We may need to throw some technology away as it’s becoming popular now, it’s worth an ongoing investment. That is truly a challenge for us, but it’s more important I think for us to think about the eventuality of, if we provide this experience, what will people want next? What do we think is going to add a lot of value to that? To be able to plan out a little bit more beyond that first hill is a pretty critical thing to think about what else will really add to that experience. In my experience, there is always a little bit of throwaway work but it’s important to see it as you are undertaking it and to make be a little bit more predictive around what you’re going to have to do.

We may need to throw some technology away as it’s becoming popular now, it’s worth an ongoing investment. That is truly a challenge for us, but it’s more important for us to think about the eventuality of, if we provide this experience, what will people want next?

Sanjog: There are two things at play here. One, you go in partial, consciously. Second, is the very definition of what you see as digital for that matter? The customers use digitally when that definition is morphing. The throwaway work is not going to be any less going forward because the way the innovation is happening, the way the customers are shifting, in the way they want to be communicated with or the way they want to consume something, even that shifting.

Marianne: I do think that we have to make pretty deliberate decisions about which investments are short-term and which ones are long term. When you said the phrase, “digital new to digital now,” the thing that came into my mind is that digital new is an innovation that we’re trying for the first time. Digital now means, we actually have a channel an online channel, a mobile channel and those are longer-term investments. Those do not require a different level of investment. They just ongoing capabilities, figuring out how we’re going to unlock that value for customers. When we think about how to govern and how to manage these, we actually have to consider that we’re going to be paying for these things on an ongoing basis and we’re going to be measuring and managing the revenue that comes from them.

Those are just the stakes to play.

Companies actually really need to realize, “I didn’t just go pay an outside firm to build me a mobile app, and I’m done. I want it done.” It actually requires ongoing investment. You have to really think about that that I just had a baby and I’m going to need to take care of it for a while.

The other thing that you mentioned there is, if we do see that we’re throwing away things or throwing things at a wall and seeing what sticks, then we actually have to look at our strategy. We have to go back and say you know, we’re groping around in the dark here. We have to actually go back and look to see how effective the things that we have put out there are. We have to have a good pipeline process for looking at ideas and determining which ones will really merit the investment for taking the live as products and that’s an important – that innovation pipeline is very important for companies and to have the governance structure to be able to make decisions about what really is most important.

I’d also say that the throwaway work can be a little demoralizing to your teams too. You have to also look closely at what it is taking to operate and operational lives your innovations. That’s a pretty key thing, that’s an area that often people in the back room are scrambling and really can’t maintain, effectively maintain or things will break, customers will get dissatisfied. Your portfolio has to have a balance of really spending the money to operationalize the critical things, and having and reserving some for new innovation and that’s a big challenge for companies.

Digital now means, we actually have a channel an online channel, a mobile channel and those are longer-term investments. Those do not require a different level of investment. They just ongoing capabilities.

We have to have a good pipeline process for looking at ideas and determining which ones will really merit the investment for taking the life as products.

Sanjog: Most companies are fearing from dipping their toe or maybe swimming in the digital is because they don’t know how will they manage? What would be their governance model because as you change different aspects of your business, the governess model would shift as well and governance means to bring stability and if you’ve got a moving target of what governance means, God bless us all how we’ll be managing anything? How do we tackle that?

Marianne: I think most companies are finding themselves in two modes. The traditional mode is that you have operations and then you have the capital for investment and that capital goes to projects. But for the last eight years, I’ve worked in the model where that is partially true, maybe for a half or two thirds of your capital but the other part of your capital is reserved for improvements made by dedicated teams that are devoted to your digital channels, the size of the factory and a product team that they work closely with and that gets governed by consistent readouts and a measurement of the revenue returns on those channels. I think most of us are in that kind of a model today. It’s very important that in that product model that that product model shows back, here’s where we are effective and how we are effective.

Sanjog: I would like to really thank you, Marianne, because this is not an easy topic and we know we’re all struggling with it, but you beautifully handled it and I’m sure listeners would get a lot of valuable – just listening to your thoughts. Thanks so much. I hope organizations will be able to move forward and effectively shift from digital new to now. Thank you.

Contributors

Marianne Marck joined Ritchie Bros. as Chief Information Officer in April of 2016. Prior to joining Ritchie Bros, Ms. Marck was Senior Vice President, Retail and Digital Technology at Starbucks Coffee Company. Ms. Marck has over 15 years of... More View all posts

Marianne Marck joined Ritchie Bros. as Chief Information Officer in April of 2016. Prior to joining Ritchie Bros, Ms. Marck was Senior Vice President, Retail and Digital Technology at Starbucks Coffee Company. Ms. Marck has over 15 years of executive experience relating to technology and digital platforms working with companies such as Blue Nile Inc., the Walt Disney Internet Group, and CNET Networks. LessView all posts